CIBC once again rates as the worst financial institution in Canada for small- and medium-sized businesses, according to a new Canadian Federation of Independent Business banking survey of almost 13,000 business owners.

“CIBC’s connection with small business basically continues to scrape the bottom,” CFIB president and CEO Dan Kelly said. The bank also rated lowest in CFIB’s last survey in 2009.

Meanwhile, credit unions continued to rate highest and outperformed all banks in the survey.

CIBC and TD Canada Trust had the highest financing refusal rates, but TD Canada Trust had stellar ratings in service. The Royal Bank rated poorly for fees and HSBC rated poorly for relationships with account managers.

HSBC’s overall rating took a free-fall plummet from second place to near last over the three years since the survey was last conducted, Kelly said. The bank has moved to a centralized model where branch managers may be located in a different city. One Vancouver respondent to the CFIB survey reported having 22 account managers in 19 years of doing business with HSBC.

Credit unions have become the best option not only for micro firms with fewer than five employees, but also for small- and medium-sized businesses in general, Kelly said. As credit unions themselves grow, they are doing a better job of serving businesses throughout their life cycles, he said.

The gap between credit unions and the big banks is significant and widening, Kelly said. Survey participants rated the credit unions 7.4 out of 10, while the best rating among the big banks was just five.

Overall, among banks, the Bank of Montreal and Scotiabank rated well for small business, and tied as the best of the big five.

The overall loan rejection rate for 2012, as reported by survey respondents, for 2012 was 18.4 per cent. This compares to 10.5 per cent in 2000 but 19.4 per cent in 2009. Saying no to loans was high at TD Canada Trust (25.6 per cent), Scotiabank (24.3 per cent) and CIBC (24.2 per cent). HSBC refused only 12.5 per cent of requests, typically deals with larger businesses, which may more easily meet financing requirements.

CIBC and HSBC appear to be deliberately pulling away from small business, a strategy Kelly called short-sighted as most small businesses bring personal and employee business with them.